NAPERVILLE, Illinois, Sept 18 (Askume) – China’s corn imports have fallen in recent months, along with those from its new preferred supplier, Brazil.
However, Chinese buyers are not looking to U.S. corn to fill this gap.
In the first eight months of 2024, China imported 12.56 million tons of corn, a decrease of about 16% year-on-year. Arrivals were higher in early 2024 than in 2023, but this increase disappeared in May and the deficit has widened year-on-year.
China began importing large quantities of corn in late 2020, with the main supplier being the United States, but two years later, when China approved the import of Brazilian corn, US exports fell.
US corn exports jumped a record 31% in the 2020-21 marketing year, but fell to 18% in 2022-23 and then below 6% in the recently concluded 2023-24 marketing season.
In comparison, less than 3% of Brazil’s corn exports will be sent to China in 2022, although the proportion rose to 29% last year.
China’s fourth consecutive record corn harvest will not deter imports as foreign supplies may be cheaper than domestic supplies when global prices are low.
Furthermore, the recent decline in China’s corn imports does not reflect the trend in other grains, as this year’s imports of wheat, barley, and sorghum are all significantly higher than last year.
Brazilian Small Crops
Brazil’s 2023-24 corn production, most of which was recently harvested, is down about 12% from last season’s record crop. In July and August, the first two months of Brazil’s normal shipping window, corn exports fell 29% from the same period last year.
After setting a stunning monthly record late last year, Brazilian exports suffered a similar drop in the first half of 2024, partly explained by a recent slowdown in Chinese corn imports.
This pattern is likely to continue in the short term, as shipping lineups suggest Brazil’s September corn exports could be down by about a quarter from last year.
Corn exports from the second-largest exporter are likely to remain modest next year as Conab on Tuesday estimated corn production in 2024-25 to be 3.6% higher than last year, but still below a record high and about 9% lower than last year.
Despite a larger harvest, exports are expected to decline in 2024-25, partly due to higher domestic consumption.
Will the United States stand by and watch?
In theory, Brazil’s reduced corn supply and the US’ record harvest would create opportunities for US exporters, as the two countries account for more than half of global corn exports.
But the US may have to pin its hopes on traditional corn customers such as Mexico and Japan, as China has next to zero interest in its supplies in 2024-25. China has not bought significant quantities of US corn since early 2023.
Historically, U.S. agricultural trade with China has not thrived amid heightened diplomatic tensions, and those tensions are likely to resurface as the U.S. presidential election approaches.
The Biden administration confirmed another hike in tariffs on Chinese imports on Friday , which could make things worse for Democratic presidential candidate Vice President Kamala Harris. Her opponent, former President Trump, has vowed to impose higher tariffs on all Chinese goods.
The 2018 trade war further strained Brazil’s relationship with China over soybeans, so U.S. corn exporters should not expect concessions from China if a more sweeping trade dispute arises.
Karen Brown is a market analyst at Askume. The views expressed above are her own.
The views expressed are those of the author. They do not reflect the views of Askume News, which is committed to integrity, independence and non-partisanship under the principles of trust.
